The pattern in the real estate market these days is the same. And it is an outrageous one. Investors buy into impressive-looking projects. As these run aground, the promoter goes underground. And so, unfortunately, do the investors’ hopes and their money.

Ever since Weekly blew the lid off the A&A Marketing scam, we have been inundated with tales from victims. These tales are not new in Mauritius. Atrium dates back to 20 years ago and the victims may never see their money again or a brick of the property they paid for. The latest is Le Meritt, which compounds the allegedly fishy deal with the fact that the promoter is also the architect – a dual function that can cause conflict of interest, begging the question of the role of the Professional Architects’ Council.

Once the promoters run away with a big chunk of the meat, administrators rush in to suck the bones and dip into the gravy. Once the victims realise what is happening to them, the promoter has walked away with their dinner and the administrator has taken the dining table too. They are then subdued into silence to safeguard the cutlery. 

Though some of the promoters may be bad businessmen, most are crooks who make a living feeding off the innocent and the hard-working. They put up real estate schemes knowing very well that they are not viable. They pump out the maximum amount of funds – which they hide safely so that they cannot be seized through bankruptcy procedures – before they pull out of the operations - their assets as safe as a baby in his mother’s arms. 

In the case of A&A’s Gyan Kessewnath, we constantly get reports of him and his family driving around in powerful cars and sporty coupés. The victims had to pay 50% more than what they had paid already for a flat or a bungalow which will be delivered to them incomplete. Those who opted to take their money and walk away are in an even worse situation as they will only get 50% of what they had paid and there is no indication as to when they will get even that. If you price in inflation, by the time they get even half of what they paid some five years ago, it will not even be worth a quarter. In the case of Le Meritt, the story is the same. As for Atrium, it is even worse as the poor victims have been struggling for 20 years to see even a shadow of the money they paid.

Every time a property scam or bad deal is brought to light, there is a bit of weeping, some fake sympathy from the authorities, some protests at the promoters and administrators and everyone goes about their own business. Nobody has thought of writing laws to protect future consumers from falling prey to crooks and idiots. Yet, this nonsense – all of it – would come to an end if our legislators cared enough to introduce similar laws to the ones regulating the UK property market, for example.

As the law stands today, only good promoters – few and far between – choose the option to safeguard the buyers’ interests through a Vente en Etat Futur d’Achèvement (VEFA) guarantee. This means that if the promoter turns out to be a crook or he genuinely runs into financial difficulties, investors do not lose their money as the bank or insurance company which underwrote the risk guarantees that their property is completed and handed to them. Naturally, this has a cost which the consumer will pay for at the end of the day. But, considering the number of unsuspecting victims who stand to lose their shirts, the daylight robbery cannot continue. The status quo is, therefore, no longer an option.

This opinion appeared in Weekly's edition 21-27st of August